GM Strike Takes a Toll as Retail Sales Decline in July

WASHINGTON — Retail sales fell for the first time in nine months in July, hurt by the General Motors Corp. strike. But excluding car sales, consumer demand remained solid, government reports showed Thursday.

The Commerce Department said retail sales fell 0.4% to a seasonally adjusted $224.7 billion last month, the first decline since last October, after rising 0.1% in June.

But the drop in sales, smaller than analysts' forecasts of 0.8%, was concentrated at auto dealers, where sales fell 3%, the steepest decrease in 15 months.

Other reports Thursday pointed to a strong job market and robust consumer confidence.

The Labor Department said new claims for state jobless benefits fell 7,000 to 301,000 in the week ended Aug. 8, well below economists' forecasts of 312,000.

The closely watched four-week moving average, which irons out weekly fluctuations and gives a better indication of the jobs market, slid by 9,000 to 306,500 in the latest week.

The latest ABC News/Money magazine survey showed 72% of Americans were optimistic about the economy despite the Asian crisis and the gyrating stock market.

A separate report Thursday showed that prices U.S. businesses paid for imported goods declined in July for the ninth month in a row, by 0.9%, reflecting the effects of Asia's economic weakness and the dollar's strength.